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Carsales Staff18 Feb 2009
NEWS

GM reveals its survival plan

Holden remains 'viable' in face of sweeping cutbacks

Hot on the heels of Chrysler's Viability Plan being submitted to the US Department of Treasury comes General Motors' own road map for the future. The 117-page document outlines the company's request for US$16.6 billion in financial support from the American government.


Crucially for Australia, GM states in the report that Holden will remain a "viable operation" despite the fact "continued local production has become more challenging due to changes in market preferences". Holden's ability to earn Australian Government funding for its new small car program was crucial in GM's assessment of the local operation.


Holden can consider itself fortunate with one of the major features of the plan is a reduction in the number of brands GM operates globally as part of wider cutbacks across the company. Chevrolet, Cadillac, Buick and GMC will be GM's priority with a more focused product line-up for each. Pontiac would be retained as a niche brand but with a much reduced portfolio, possibly as few as three models.


After completing its strategic review the company is hopeful of setting up Saab as a stand-alone operation by January 2010. But GM is also requesting help from the Swedish government because the company could file for Reorganisation as early as this month.


Hummer and Saturn are also expected to be cut loose before the end of 2011. It appears there is little interest in anyone taking over Hummer with GM admitting in the document that it is still considering phasing out the brand. A decision on that is expected by the end of March.


And its not just brands that will be cut. The plan calls for 47,000 employees to be cut by the end of 2009 with 26,000 of those coming from its overseas operations.


After a much tougher than expected marketplace in December and January GM has revised its sales expectations. It is now forecasting global sales of 6.9 million vehicles for 2009, which would mean a drop of 960,000 over 2008.


GM is hopeful that with the government bailout its plan can return the company to profitability within 24 months and begin paying back the loans by 2012.


One area where GM's plan was much less detailed than Chrysler's is information on future models. While Chrysler revealed plenty about its product planning over the next five years GM's only contained a glimpse of its already confirmed models. For Chevrolet that means the Volt, Cruze, Camaro and Equinox SUV. Cadillac will roll out the CTS Sportwagon and Coupe and SRX SUV over the next two years and Buick will release the Lacrosse.



 

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